WASHINGTON: US President Joe Biden will raise his current Federal Reserve Chairman Jerome Powell for the second four-year term starting in February next year, according to the majority of economists surveyed by Reuters this week.
Powell served from Janet Yellen as Chair of the Fed Governor Board in February 2018 and had to maneuver the economy through the worst crisis since World War Dua, the Covid-19 pandemic round which began early last year.
The White House will decide in the coming months whether you want Powell to remain but there is a decision to replace it can light up the same market reaction as the US economy struggles with high inflation and employment activities.
Ninety percent of economists, or 36 of 40, in response to additional questions in the Journal of Reuters July 12-15 on the US economy, said Biden would choose the status quo.
“This (the removal of Powell’s return) is likely at this time.
Powell does have several strong competitions, especially from Lael Brainard, one of his colleagues as governor.
He is the second most likely, but Powell is a favorite right now,” said James Sweeney, chief economist at Credit Suisse.
Jim O’Sullivan, the head of the US macro strategist at TD Securities, agreed.
“I think it’s like a tradition.
If you are seen doing a decent job for continuity, the President refers to again, even if it is the president of the different parties that appoint him in the first place,” he said.
In this week’s Congress audience Powell promised “strong support” to complete the economic recovery of pandemic and said the Fed had to stay focused on getting many people back to work.
He also said a sudden surge of inflation was temporary.
Powell’s focus on work has won praise from the Biden government and among the wider community of democratic policy analysts.
Private equity lawyers were promoted to the Fed seat by the President of the Republic of Donald Trump, he has also won early support for the second term of several Republican Congress.
But the same hearing sees sharp questions from members of both parties, offering overview of problems that might frame the debate about the future of Powell.
The Republican Party said they were worried that high inflation would recently survive, and that Powell might be too long loose for it; Some Democrats argue that he is not quite difficult at Wall Street Banks big.
The shift in the Fed’s peak work will come when the central bank puts a plan to remove $ 120 billion in purchasing monthly bonds and handles political debates around inflationary pressure, both sensitive and potentially disturbing discussions.
Four economists in Reuters poll said Biden would not raise Powell, with two of those who predict Lael Brainard, a member of the Board of Governors of the Central Bank, will take over.
“This is a very close call.
Powell has done a good job and works well with the US treasury, but we will not be surprised to see Joe Biden see to strengthen diversity at the senior level,” said James Knightley, head of the international economist in Ing.
US Treasury Secretary Janet Yellen and Powell will discuss the red-hot housing market and the risks with fellow regulators on Friday, to ensure the country is not vulnerable to accidents similar to the financial crisis in 2008.
A sudden recurrence at home prices can Pose another serious threat to the economy.
Meanwhile, the highly contagious Delta variant has become the dominant Covid-19 tension and further variations raises the top economic risk this year.